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EC gives Telefonica/E-Plus deal final approval

1 Sep 2014

Telefonica Deutschland has received final clearance for its EUR8.55 billion (USD11.9 billion) acquisition of Dutch telecom operator KPN’s German mobile unit E-Plus, after the European Commission (EC) confirmed that the previously announced agreement with Drillisch complies with the agreed upfront conditions. The approval raises the potential for further consolidation in European telecoms markets; the combination of Telefonica and E-Plus will reduce the number of German network operators from four to three, with the enlarged Telefonica becoming the market leader ahead of Telekom Deutschland and Vodafone Germany. ‘With the final clearance of the EC now granted, we are able to close the transaction soon, and create a leading digital telecommunication company in Germany,’ said Markus Haas, CSO of Telefonica Deutschland, with the firm’s CFO Rachel Empey adding: ‘By combining the strengths of both Telefonica Deutschland and E-Plus, the new company is well positioned to challenge the market with even more innovative products and services, combined with a great customer experience.’

In the course of the merger clearance process, Telefonica has agreed to sell upfront 20% of its mobile network capacity using a ‘mobile bitstream access’ model, with the opportunity to extend up to an additional 10%. Telefonica had signed a corresponding contract with Drillisch, which the EC has now confirmed complies with the upfront conditions associated with the approval of the transaction. Telefonica Deutschland says it ‘remains confident’ of closing the acquisition during the third quarter of 2014; as a next step, the firm will execute the capital measures to finance the transaction.

Germany, E-Plus Group, KPN, Telefonica, Telefonica Deutschland Holding

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